3. SPATIAL COVERAGE AND AREA DESIGNATION
3.2 The selection of eligible areas
Under RAG 2014-20, as under RAG 2007-13, ‘a’ region coverage is predetermined by the Commission. An important change under RAG 2014-20 is that the population allocation determined by the predefined areas former ‘a’ areas (broadly analogous to the economic development areas in RAG 2007-13) may only be used to designate those areas.116 In 2007-13 some countries (for example the United Kingdom and Italy) used this population to designate areas other than in the qualifying regions; this is not possible under RAG 2014-20. 117
There is slightly more flexibility in the designation of sparsely-populated areas (as was the case under RAG 2007-13). Whilst in principle these should concern NUTS 2 regions with fewer than 8 inhabitants per km2118 or NUTS 3 areas with fewer than 12.5 inhabitants per km2, parts of adjacent NUTS 3 areas may also be designated, provided that those parts also have population density below the 12.5 inhabitant per km2 threshold.
Proposals for the designation of the non-predefined areas are the responsibility of domestic authorities, subject to the parameters set out in RAG 2014-20119 and Commission approval of the resulting map. The parameters set by the Commission concern both designation criteria and geographical units of analysis – ‘building blocks’.
3.2.1 Area designation criteria for investment aid (non-predefined ‘c’ areas)
The key designation criteria are set out in Table 10. At first sight this appears as a rather complex matrix of options. In practice, however, the criteria are similar to those for RAG 2007-13: in general, areas must have GDP(PPS) below the EU average or an unemployment rate 15 percent higher than the national average. The key differences between RAG 2014-20 and its predecessor are that there is now greater flexibility on minimum population coverage for countries with relatively low coverage and that the ‘structural change’ criterion, which requires a minimum population of 50,000 cannot be used to designate areas that could qualify under Criterion 1, or Criterion 2. Also, the capacity to target very localised problems for areas with a minimum coverage of 20,000 through support for SMEs has been dropped. While the minimum population criteria show more flexibility, at least for some countries, as will be seen below, the building block requirements introduce new constraints.116 RAG 2014-20, para 159.
117 Though Member States could opt not to include all the predefined areas in the proposed map; the corresponding population quota would however, be ‘lost’.
118 As noted earlier, the reference to NUTS 2 areas as the basis for predefined sparsely-populated areas is new, but the flexibility to designate parts of NUTS 3 areas is not.
Table 10: Key area designation criteria for non-predefined ‘c’ areas
Criterion Conditions Minimum population
1. Contiguous areas
Within NUTS 2 or NUTS 3 regions with either:
GDP(PPS) per head ≤ EU27 or Unemployment rate ≥ 115% of
national average
General case: 100,000
For MS with ‘c’ coverage 1million: 50,000
For MS with national pop 1million: 10,000 2. NUTS 3 regions with
pop < 100,000
GDP(PPS) per head ≤ EU27 or Unemployment rate ≥ 115% of
national average Not applicable 3. Islands and other
contiguous areas characterised by geographical isolation
GDP(PPS) per head ≤ EU27 or Unemployment rate ≥ 115% of national average or <5000 population None 4. Border areas Contiguous areas NUTS 3 or parts of Adjacent to ‘a’ region, or Land border with non-EEA
country
None
5. Structural change or serious decline
Must not be within areas that fulfil criteria 1-4 above
Contiguous areas
General case: 50,000
For MS with ‘c’ coverage 1million: 25,000
For MS with national pop 1million: 10,000
Isolated areas (cf criterion 3): 5,000
Source: Summarised from RAG 2014-20, para 168.
The national populations and the coverage of non-predefined ‘c areas are given in Table 11. This suggests that only Cyprus and Luxembourg qualify for the 10,000 population minimum under Criteria 1 and 5; and that Denmark, Hungary, Portugal and Finland qualify for the 50,000 and 25,000 population minima under Criteria 1 and 5 respectively.
Table 11: Non-predefined ‘c’ areas and national population
Non predefined ‘c’ population(‘ 000s) National population (000s)
DK 460 5546 DE 11774 81766 IE 2386 4475 EL 4959 11312 ES 14670 46074 FR 14086 64823 IT 2873 60477 CY 415 831 LU 41 508 HU 658 9994 NL 1245 16603 AT 2258 8392 PT 793 10639 FI 103 5362 UK 14027 62257
3.2.2 Building blocks for investment aid (non-predefined ‘c’ areas)
The geographic unit of analysis – or building block - is specified as local administrative unit 2 (LAU2) – see Table 12.120
Table 12: Geographical units – EU definitions
NUTS 2 NUTS 3 LAU 1 LAU 2
BE Provincies /
Provinces 11 Arrondissementen / Arrondissements 44 - Gemeenten /
Communes 589
DK Regioner 5 Landsdeler 11 Kommuner 99 Sogne 2143
DE Regierungs-
bezirke 38 Kreise 412 Verwaltungsge- meinschaften 1481 Gemeinden 12066
IE Regions 2 Regional Authority
Regions 8 Counties, Cities 34 ElectoralDistricts 3441
ES Comunidades y
ciudades Autonomas
19 Provincias + islas
+ Ceuta, Melilla 59 - Municipios 8116
FR Régions + DOM 26 Départements +
DOM 100 Cantons de rattachement 3785 Communes 36680
IT Regioni 21 Provincie 110 - Comuni 8094
CY - 1 - 1
(Eparchies) 6 Dimoi, koinotites 615
LU - 1 - 1 Cantons 13 Communes 116
HU Tervezési-
statisztikai régiók
7 Megyék +
Budapest 20 Statisztikai kistérségek 174 Települések 3154
NL Provincies 12 COROP regio’s 40 - Gemeenten 418
AT Bundesländer 9 Gruppen von
politischen Bezirken 35 - Gemeinden 2357
PT Comissaoes de
Coordenaçao regional + Regioes auto.
7 Grupos de Con-
celhos 30 Concelhos - Munícipios 308 Freguesias 4260
FI Suuralueet /
Storområden 5 Maakunnat / Landskap 19 Seutukunnat/ Ekonomiska regioner 70 Kunnat / Kommuner 336 SE Riksområden 8 Län 21 - Kommuner 290 UK Counties (some grouped); Inner and Outer London; Groups of unitary authorities
37 Upper tier authorities or groups of lower tier authorities (unitary authorities or districts)
139 Lower tier auths individual unitary auths; Individual unitary auths or LECs (or parts); Districts 380 Wards (or parts thereof) 10310 Source: Eurostat
An important issue is the notion of ‘contiguity’, which is an explicit requirement of Criteria 1 and 3-5, and implicit in Criterion 2. The notion of contiguous areas refers to whole LAU2 areas or to a group of whole LAU2 areas. A group of LAU2 areas is considered to be contiguous if each of those areas in the group shares an administrative border with another area in the group. However, parts of LAU2 may be designated, provided that the population is at least 50 percent of the minimum population required under the criterion applicable. Under Criterion 1, for example, in the general case, this appears designed to preclude the inclusion of an area comprising a population of 150,000 of which 120,000 in one LAU2 and the remaining 30,000 in parts of adjoining LAU2. In contrast with the provisions on population minima outlined in Table 12, this ‘anti leopard skin’ clause represents a significant tightening of existing provisions. For 2007-13 a number of countries designated areas on
the basis of units below LAU2, and while these maps were accepted, it is also known that such approaches were not always considered by the Commission to be ‘within the spirit’ of RAG 2007-13.
3.2.3 Assisted areas for operating aid
It is important to note that the above discussion relates to area designation for investment aid, which accounts for most schemes. RAG 2014-20 also allows for the possibility of operating aid being compatible:
….”if it aims to reduce certain specific difficulties faced by SMEs in particularly disadvantaged areas falling within the scope of Article 107(3)(a) of the Treaty, or to compensate for additional costs to pursue an economic activity in an outermost region or to prevent or reduce depopulation in very sparsely populated areas”.121
Apart from the Outermost regions, which are defined in the TFEU, the targeting of operating aid schemes is determined on the basis of separate maps from that for investment aid and is not linked to the population ceilings. RAG 2014-20 makes specific reference to the eligibility of ‘very sparsely populated’ regions for operating aid. These are defined as
“NUTS 2 regions with less than 8 inhabitants per km2 or parts of such NUTS 2 regions designated by the Member States concerned in accordance with paragraph 162 of these guidelines”122
The basic definition is unchanged from RAG 2007-13.123 However, there would appear to be a typographical error regarding flexibility in this provision since paragraph 162 is not really relevant to the coverage of sparsely-populated areas. It may be that the reference is intended to be to paragraph 161, which would have entailed a material change to the definition of very sparsely populated areas that was not been signalled elsewhere in the reform discussions. On the other hand, all indications are that no change was intended. This is reflected in the approval of the Norwegian assisted areas maps for the social security discussed above.
121 RAG 2014-20, para 16.
122 RAG 2014-20, para 20(y). 123 RAG 2007-13, para 80.